As part of restructuring efforts in the oil-rich emirates led by state-owned holding firm ADQ, Abu Dhabi intends to merge two food and beverage firms to create a new national champion in the industry.
ADQ-owned industrial conglomerate Senaat has introduced a non-binding proposal to the board of directors of Agthia Group, a food company listed in Abu Dhabi, to move the majority shares of Al Foah Company to Agthia.
Senaat-owned Al Foah is the largest date processing and packaging business in the world.
ADQ said in the statement, “The proposed transaction would combine two leaders in their complimentary food and beverage product categories to create one of the top 10 consumer F&B players in the MENA region”.
In water, dates, flour, and animal feed, the merged company will become a “domestic champion” it commented.
As per the agreement, Senaat would transfer the entire issued share capital of Al Foah to Agthia in exchange for a convertible instrument issued by Agthia to Senaat and convert into Agthia’s 120 million ordinary shares after the closing of the deal.
ADQ said that the exchange price for the convertible instrument will be $1.02 (3.75 dirhams) per share, showing an equity value for Al Foah of $122.52 million (450 million dirhams).
Senaat will own 59.17 percent of Agthia’s entire issued share capital after the contract, up from the 51 percent it currently holds.
ADQ is a holding company with a wide portfolio of major businesses covering the diversified economy of Abu Dhabi’s main sectors. It has also built up a food and agriculture area portfolio and recently took a 22 percent stake in Aramex, a courier based in Dubai.